They’ve Been Waiting Years to Go Public. They’re Still Waiting.

Turo, a car rental startup based in San Francisco, has been aiming to go public since 2021. However, a turbulent stock market in early 2022 delayed its plans for a listing. Since then, the company has been waiting for a more opportune moment.https://svtoday.org/

Last week, Turo decided to completely cancel its public offering. CEO Andre Haddad explained in a statement, “Now is not the right time.”

For several months, investors were eagerly anticipating a surge of initial public offerings (IPOs), sparked by the new administration under President Trump. After his election victory in November, which followed a contentious campaign, the business world and Wall Street anticipated a period of pro-business policies and reduced regulation. The stock market soared in anticipation of a flurry of deal-making.

However, the administration’s tariff policies and swift regulatory changes have introduced uncertainty, while inflation has triggered market instability. Moreover, the sudden rise of the Chinese AI app DeepSeek last month led investors to rethink their optimistic positions on U.S. tech stocks, causing a significant sell-off in AI-related shares.

These developments have had an impact on IPO activity. “The calendar went from fully booked to wide open in just about three weeks,” said Phil Haslett, founder of EquityZen, a platform that helps private companies and their employees sell shares.

So far this year, the volume of IPOs has slightly exceeded last year’s pace, with companies raising $6.6 billion from listings, a 14 percent increase from the same period in 2024, according to Renaissance Capital, which manages funds focused on IPOs.

Despite this, the anticipated wave of IPOs has yet to materialize, especially among large companies that had been waiting for years to go public. In addition to Turo’s canceled listing, Cerebras, an AI chip company that filed its prospectus last fall, has also postponed its public offering.

It is still unclear whether ongoing concerns about inflation, interest rates, and global political risks will cause other companies to rethink their IPO plans. Advisors and analysts suggest that more IPOs may occur in the second half of the year.

Rachel Gerring, IPO leader for Americas at EY, an accounting firm, said, “We need a bit more time to see where the administration lands on key topics driving uncertainty. IPO planning is still very much ongoing.”

Klarna, a lending startup, and eToro, an investment platform, have recently filed confidentially to go public. However, many top private tech firms, including Stripe and Databricks, have indicated they prefer to remain private for now, opting to raise funds through private markets instead.

David Solomon, CEO of Goldman Sachs, explained last month that one reason for the slowdown in IPOs is that startups can now raise the capital they need from private investors. Goldman Sachs helped Stripe, the $70 billion payment startup, secure billions last year.

“Stripe would have been forced to go public years ago due to its capital requirements, but now it doesn’t have to,” Solomon remarked at a conference organized by Cisco.

To alleviate pressure to go public, Stripe has allowed employees and shareholders to regularly sell stock through tender offers, enabling them to cash out without forcing the company to list. These transactions also help prevent employee shares from expiring and allow workers to settle tax liabilities related to stock sales.

The number and size of tender offerings grew significantly in 2024. According to Carta, a platform for managing shareholders, companies performed 77 tender offers in 2024, up from 68 in 2023, raising $3.5 billion — more than double the $1.7 billion raised the previous year.

Databricks, an AI data company, raised $10 billion in December, using some of the funds to allow current and former employees to cash out and pay taxes.

In December, Veeam, a data company, raised $2 billion for existing investors. Plaid also hired Goldman Sachs this year to raise up to $400 million in a tender offer, giving shareholders the opportunity to sell.

Solomon has often told startup founders there are three primary reasons to go public: raising capital, allowing shareholders to sell stock, and using public market currency for acquisitions. However, he noted that the first two reasons have been addressed through private markets. “Going public should be done with great caution,” he advised, noting that it changes how a company operates. “It’s not easy being a public company.”

Many companies have postponed their IPO plans due to market volatility. In early 2022, as interest rates increased and the war in Ukraine destabilized markets, several firms delayed their public offerings.

Justworks, a payroll and benefits software company, was on the verge of pitching public investors in January 2022 but decided to hold off. COO Mike Seckler said it was tempting to go ahead with the listing after months of preparation, but the market volatility and the poor performance of IPOs that year validated the decision. Justworks, which was profitable and had $125 million in the bank, ultimately scrapped its plans to go public. “It started to feel like we’d be forcing something,” said Seckler, now CEO. “Our time will come.”

Navan, a travel software provider, confidentially filed to go public in 2022 but later withdrew its plans. The company recently began a “non-deal” roadshow to meet investors and lay the groundwork for a possible listing in the second half of the year.

Similarly, StubHub, the ticketing company that filed for an IPO in 2022, is also aiming to go public sometime this year.

Given the volatile market, bankers have urged unprofitable tech companies to focus on making money before pursuing an IPO. For a company to attract public investors, bankers are pushing them to generate at least $200 million in annual revenue. For smaller or unprofitable firms, investors expect to see strong revenue growth.

“The bar has been raised for companies that can go public,” said Amy Butte, CFO of Navan.

Sanjay Dhawan, CEO of SymphonyAI, a software company, noted that bankers have advised him to reach $200 million to $300 million in revenue before considering an IPO. His company surpassed $400 million last year and became profitable.

Dhawan added that he had been waiting for clarity on the election results before moving forward with an IPO. “Now we know what economic policies will look like,” he said. “It’s a bit of a relief to start planning.”

The recent volatility in AI stocks, particularly from DeepSeek, he believes, was a short-term reaction.

At least one tech company recently succeeded in going public. On Thursday, cybersecurity firm SailPoint Technologies raised $1.38 billion in an IPO, valuing the company at around $12 billion. However, its stock dropped 4 percent on its first day of trading.

For the IPO market to truly pick up speed, “a few brave companies need to take the plunge,” said Phil Haslett of EquityZen.